by Lauren Dever
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3 best practices on Pipeline Management from a conversation with Tom Vandeloo (Partner, PwC, retired).
- The number one best practice for high quality pipeline management, as well as for efficiency and value creation, is to have an incredibly good feel for what the overarching inorganic growth strategy is. People get excited about potential deals and sometimes lose focus of this strategy or fail to initially realize these opportunities are not strong fits. This means you must have criteria to assess incoming opportunities against. Companies that pursue this type of strategy statistically have a much, much better track record of creating value and having successful deals than those who approach deals and pipeline management solely opportunistically or without a clear plan.
- Having an in-house “black hat” or skeptic helps to kill bad deals early and only focus on the really high-value creation and high-strategic alignment types of deals.
- A 3x3x3 approach as you work through the pipeline is a good rule of thumb. You want to have three relationship building and analysis exercises for each early target that might eventually turn into a proposal. This method lends itself to efficient pipeline management because the early pipeline analyses take less time and effort and can help you eliminate potential targets that do not fully align with your overarching strategy and value creation goals.
Overall, approaching deals strategically, versus opportunistically, leads to first-rate deals versus deals that might be okay, but will probably never be great.